Gold Outlook 2011: Irreversible Upward Pressures and the China Effect

Seeking Alpha ^ | January 11, 2011 | Nick Barisheff

[arthurus]

I know this may appear to some to be an enviable job—getting to speak about the one asset class that seems to continually out-perform all others year after year—but it is a double edged sword.

I’ve struggled to find an appropriate simile. The best I can come up with is that speaking about gold is like one of those good news bad news jokes, you know the ones—your doctor phoned with some good news and some bad news. The good news is they will be naming a new incurable disease after you.

The good news is that gold is rising in value; the bad news is—well, nearly everything else about the economy.

This year we traveled to the Middle East, the Far East and South and Central America to discuss gold. The different mindsets about gold we encountered there surprised all of us. Most people in these countries see gold as the protector of wealth. In the West, we view gold as a commodity for speculation.

Western economists treat the act of buying gold as an admission of defeat

[FromLori]

India Gold Imports Hit Record As “Price Is No Longer A Factor”

http://www.zerohedge.com/article/india-gold-imports-hit-record-price-no-longer-factor

[epithermal]

http://dailyreckoning.com/the-benefits-of-gold-and-silver-not-lost-on-the-chinese/

China’s first gold fund raises target $500 million
http://gata.org/node/9503

[SatinDoll]

The closest large city to me has a precious metals seller whose selling price for gold is $1449 per ounce but they will buy it at $1389 per ounce.

We bought gold at $890 per ounce and silver at $16.80 per ounce quite a while ago. The price of silver is outrageous!

No way would I buy either right now.

[2001convSVT]

Nick Barisheff closes with a quotation that seems to put all of this into perspective. It comes from Norm Franz’s appropriately titled book, Money and Wealth in the New Millennium.

He said, “Gold is the money of kings; silver is the money of gentlemen; barter is the money of peasants; but debt is the money of slaves.”

Great quote

[arthurus]

I first bought gold at $280 and have bought at 1300. When I can save a little more I will buy a little more. Gold is neither expensive nor cheap relative. The dollar is cheap and getting cheaper.”Cheap” and “expensive” are words that don’t really apply to gold. Gold is the measure of value for everything else. Silver is a little more speculative but so long as gold is trending up so will silver. It will have higher peaks and lower troughs on the way, though. Watch the ratio. That number is on the bottom line of the Kitco realtime metals prices. When the dollar is strong and it takes a declining number of dollars to buy an ounce of gold, as in the 80s and 90s then the ratio may be high, maybe 80 to 1 gold to silver. As the dollar gets weak the ratio could get to levels of 20 or less to one as it has in the past.